Citi bailout, at the expense of your money

I'm very impressed at how the US federal government keeps bailing out ailing financial giants like AIG and Citigroup. The latest bailout being $20 billion fresh funds and $306 billion guarantee of its toxic assets. How can the federal government with $59.1 trillion of public debt find that amount of money?


There are three ways the government can get money - tax, borrow or print. In this case, tax is out of the question as lower taxes is needed to stimulate spending; borrow, well I don't think anybody dares to lend to the U.S government who is currently on heavy trade deficits. That leaves them with print.

The Federal Reserve (which is neither federal nor having any reserves) will have to be the money making machine, injecting more liquidity into the system. What does that mean to you and me? It is like giving crack cocaine to an addict. The entire economic system is like an addict now, and feeding it with more credit will only provide momentary relief but pave the road for imminent collapse. It is reinforcing the problem that caused the financial crisis - unrestrained credit. Eventually with so much liquidity in the market, the dollar that you and I hold will be useless.